Anheuser-Busch stock loses over $5 billion in market cap following backlash to trans spokesperson

The Yahoo Finance Live team discusses the decline of Anheuser-Busch stock amid backlash over its partnership with trans TikTok star and spokesperson Dylan Mulvaney.

Video transcript

- Bud is my play. Anheuser-Busch, InBev, or Bud as you know it. Bud Light this time embroiled in a brouhaha, you might say, since it started this promotional campaign earlier this month with transgender TikTok influencer Dylan Mulvaney. Now, the TikToker posted a video drinking a custom can of Bud Light with her picture on it, which led to an all-out revolt on the right. Boycott Bud Light has been trending on various social media platforms. Kid Rock used Bud Light cans for target practice. Bars in the Midwest reported steep drops in sales. And at one point, Bud shares had lost more than $5 billion in market cap since this began April 1.

However, Citi analyst Simon Hales says it's all overdone and could represent a buying opportunity. Quote, "we view the weakness as providing another attractive entry point for investors," adding, "although brand volumes in some states may see short-term headwinds, we do not believe these will be material nor long lasting." Evercore analyst Robert Ottenstein told the "New York Post" it's way too early to know how this controversy will hurt the brewer's bottom line.

Now, Bud shares are up today, not dramatically, a little more than 1 and 1/2% at the moment. But still, down around 4% since this all began April 1 with that TikTok video. And Josh, this isn't going away anytime soon. The analyst's point is a good one that in the long run it may represent a buying opportunity. But I'm surprised the chief marketing officer didn't initially suspect that there'd be some backlash. A bit off brand when you consider the demographic for Budweiser and Bud Light.

JOSH SCHAFER: Yeah. I think part of it, though, is they're confident in who their consumer base is as far as the long-term run, Dave. I think Bud Light drinkers are pretty loyal to drinking Bud Light, at least from all the--

- Fiercely

JOSH SCHAFER: --light beer drinkers that you and I both know. People kind of have a pick there. And they sort of stick with it. So I can understand backlash. Maybe you were just talking about some of the social media backlash you see. But how much does that actually impact sales and impact sales in the long run? And then as Citi pointed out in that note, maybe there's a Gen Z play here to start doing something different with your marketing and bring in a younger demographic. Obviously, Gen Z, my generation, isn't as big of beer drinkers right now. So maybe start appealing to that I think is probably a good play.

- Let's bring in Rachelle on this because, Rachelle, I'm curious what you make of it. Gen Z. Are you going to really bring them into the fold when it comes to Bud Light? I suspect no. But you may know better.

- I mean, I know that InBev was saying they wanted to change the image of the typical Bud Light drinker, perhaps bring more people into the fold. Perhaps not the most thought-through concept. But, I mean, I get it. They're trying to engage. And where are people? Where's Gen Z? A lot of them are on TikTok. So you go, you meet people where they are. Perhaps in the long run, this could pay off, bring in more Bud Light fans. It still remains to be seen. As you mentioned there, it's taking a bit of a hit at the moment. But, I mean, rebounding as well. So we'll have to see how that plays out.